The best way to describe it is something between a generic Google Ads network and a invite-only Carbon Ads network. And it's really meant to go in your README.md file.
So this results in a few things:
1. Broker. Sponsors can select which repos/languages/tech/etc they want to advertise to and developers can select which sponsors are relevant to them.
2. Transparent. Developers can see which ads a sponsor will display and how much they pay per click (usually $0.40). The ads are usually just text with a couple emoji that fit well into the README.md design and are loaded as an svg.
3. Limited. Sponsors pay a fixed amount so if a repo is really popular and displaying ads, it may stop displaying after the money is paid out to the developers. This means you may just get a generic ad that recommends using Code Sponsor near the end of the month, like this repo: https://github.com/styfle/geoslack
Caveats: it seems the Code Sponsor is not open source :(